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Proposed Change to Fed. eDiscovery Rule 37(e): The Yay Case

By William Peacock, Esq. on February 27, 2014 | Last updated on March 21, 2019

Last week, we talked eDiscovery and the sanctions that make the process an absolute nightmare for companies and their in-house legal departments. The advisory committee is considering revising Rule 37(e) to make sanctions less prevalent, more predictable, and only available where there is willful or intentional misconduct and the requesting party suffered prejudice as a result or, the requesting party was deprived of an opportunity to present or defend its claims.

We gave you the text of the rule, as well as the case against it. Today, let's look a bit more at the case for the rule, and some proposed alterations by the Association of Corporate Counsel (ACC).

Great for Corporations

Who gets slammed the most by eDiscovery materials? Corporations, since they have the most information to discover.

By setting a nationwide standard for sanctions, and reducing the instances of sanctions to situations where there is willful or intentional destruction of discoverable material which prejudices a party or the misconduct (reckless, negligent, or willful) deprives a party of its claims, the rule makes sanctions predictable and limited to situations where there is actual, provable harm.

This beats an unpredictable circuit-by-circuit, court-by-court standard. According to ACC, companies currently are so paranoid about sanctions that they save everything, a tactic that we'd imagine is expensive for both the company, who has to pay for storage, and the requesting party, which gets hit with a discovery dump.

Also, at present, companies get hit with spoliation accusations that are difficult to disprove. As we saw last week with Judge Scheindlin's anti-amendment argument, the burden is shifted to the sanction-requesting party to prove prejudice, which may reduce frivolous sanctions requests.

ACC Changes?

As you can probably imagine, ACC's proposed amendments [PDF] to the proposed amended rule are very pro-corporate.

The first suggestion is to make the "willful or in bad faith" standard "willful and in bad faith," because some courts interpret "willful" to mean intentional, even without a culpable state of mind.

They've got a point. Should accidental or maintenance deletion of materials be punished if it causes prejudice to the other party? Wasn't the point of the rule change to reduce instances of sanctions and to limit them to misconduct?

ACC also wants 37(e)(1)(b)(ii) ("irreparably deprived a party of any meaningful opportunity to present or defend against the claims...") deleted entirely. The organization notes that this fault-free exception comes from a Fourth Circuit products liability case, and while it is intended to be rare, it will likely be abused.

They argue that situations where conduct with limited culpability leads to destruction of evidence can be remedied with less extreme measures than sanctions (especially case-dispositive sanctions such as outright dismissal), such as precluding experts' reports and testimony.

ACC has a lot more thoughts on the rule that are worth perusing if you're intrigued by eDiscovery reform.

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